UK Trade: February 2015

• UK Trade shows the extent of import and export activity and is a key contributor to the overall economic growth of the UK

• Seasonally adjusted, the UK’s deficit on trade in goods and services was estimated to have been £2.9 billion in February 2015, compared with £1.5 billion in January 2015. This reflects a deficit of £10.3 billion on goods, partially offset by an estimated surplus of £7.5 billion on services

• The widening of the trade deficit between January and February 2015 mainly reflects a fall in exports of goods to non-EU countries, particularly to the United States. In terms of commodities, the main decreases were in the exports of miscellaneous manufactures, material manufactures and chemical manufactures

• In the 3 months to February 2015, the total trade deficit narrowed by £0.4 billion to £6.5 billion. The narrowing reflects an increase in goods exported to countries outside the EU; specifically chemicals (up £0.9 billion) and a decrease in goods imported from outside the EU. Exports of services also increased over the same period. The narrowing was partially offset by a fall in exports of goods to the EU

• In the 3 months to February 2015, the trade in goods deficit between the UK and countries within the EU reached a record high of £21.1 billion, since comparable records began in 1998. The widening of £1.5 billion mainly reflects a 5.6% fall in exports (particularly exports of oil)

The deficit of trade in goods and services for February 2015 widened to £2.9 billion from £1.5 billion in the previous month. The trade position reflects exports minus imports. This widening between January and February is the largest monthly widening since January 2014. Between January and February, exports decreased by £1.0 billion to £41.3 billion and imports increased by £0.3 billion to £44.2 billion.

The deficit on trade in goods was £10.3 billion in February 2015, widening by £1.2 billion from January. Exports fell by £0.9 billion between January and February, whilst imports rose by £0.3 billion over the same period.

In detail, exports of goods fell by £0.9 billion to £23.2 billion in February 2015, the lowest since September 2010. The decrease reflects a £1.1 billion fall in exports of manufactured goods; in particular miscellaneous manufactures (down £0.4 billion) and material manufactures (down £0.4 billion). Fuel exports partially offset the fall in manufacturing exports with an increase of £0.3 billion from January.

Imports of goods rose by £0.3 billion in February 2015, mainly reflecting a £0.4 billion increase in imports of fuels; specifically oil imports (up £0.4 billion) and a £0.2 billion increase in imports of machinery and transport equipment. These increases were partially offset by a £0.2 billion decrease in imports of material manufactures.

Focusing on trade in oil, the monthly deficit on oil was virtually unchanged at £0.7 billion in February 2015. Despite both exports and imports increasing from the previous month, the value of both transactions in the 3 months to February are the lowest for some time; 3 monthly export levels are the lowest since May 2009 and 3 monthly imports are the lowest since March 2010.

In February 2015, exports to countries within the EU fell by £0.1 billion to £11.0 billion. Decreases in almost all main commodities, particularly manufactured goods (down £0.3 billion) were offset by a £0.4 billion increase in the export of fuels. Imports from EU countries fell by £0.1 billion between January and February. Decreases in material manufactures (down £0.2 billion) and chemical manufactures (down £0.1 billion) were partially offset by increases in fuels and machinery and transport equipment.

Outside the EU, exports fell by £0.9 billion. Miscellaneous manufactures fell by £0.4 billion, material manufactures fell by £0.2 billion and chemical manufactures fell by £0.1 billion. These decreases were accompanied by other, less substantial falls in the remaining main commodities. Imports from countries outside of the EU rose by £0.4 billion, reflecting a £0.2 billion rise in the import of fuels.

Trade statistics for any one month can be erratic. For that reason, it is recommended to compare the latest three months against the preceding three months and the same three months of the preceding year.

In the 3 months to February 2015, the trade in goods deficit narrowed by £0.1 billion to £29.4 billion. The narrowing reflects a £1.2 billion fall in exports and a £1.3 billion fall in imports. At the commodity level, the fall in exports over the 3 months to February reflects a £2.2 billion decrease in exports of fuels, which was partly offset by a £1.1 billion rise in exports of chemicals. Over the same period, imports of fuels fell by £2.4 billion and imports of unspecified goods fell by £0.5 billion. Imports of machinery and transport equipment partially offset these falls with an increase of £2.0 billion.

By area, the UK’s deficit with the EU widened by £1.5 billion; mainly reflecting a £2.0 billion fall in exports (in particular, fuel exports, which fell by £1.8 billion) and a £0.6 billion fall in imports (in particular, fuel imports, which fell by £0.7 billion). The UK’s deficit with non-EU countries narrowed by £1.6 billion in the 3 months to February as exports rose by £0.9 billion; £0.9 billion of this increase is attributed to exports of chemicals and £0.6 billion to unspecified goods, partially offset by falls in material manufactures and fuels. Over the same period, imports from countries outside of the EU fell by £0.7 billion; reflecting a £1.7 billion decrease in fuel imports that was partially offset by a rise in machinery and transport equipment.

This bulletin also reports on trade in services. However, the information on trade in services is mainly obtained from quarterly surveys, in some cases underpinned by larger annual surveys. That means that the data for the latest months are inevitably uncertain.

The surplus on trade in services was estimated to be £7.5 billion in February 2015; a £0.2 billion narrowing from the previous month. The slight fall in the surplus reflects a £0.1 billion decrease in exports and a £0.1 billion increase in imports.

The value of trade in goods grew steadily from the beginning of 2007 to mid-2008. The onset of the global economic downturn in mid-2008 affected the economic performance of the UK’s major trading partners and the value of both UK exports and imports fell sharply until Q2 2009. Growth in the value of trade in goods resumed from mid-2009 with improving global economic conditions. However, the value of both UK exports and imports has remained largely flat since mid-2011 with the continuing difficulties in many economies.

The total trade balance in January was revised downwards by £0.9 billion from the January 2015 UK Trade release. The revision was primarily due to the value of imports being revised for both goods and services, whilst exports were relatively unchanged. Imports of goods were revised upwards by £0.7 billion in January 2015, due mainly to new data for trade in manufactured goods. Estimates of services imports were revised upwards by £0.2 billion.

Annually, imports of services for 2014 have been revised upwards by £1.6 billion reflecting revisions from ONS International Trade in Services Survey within other business services and telecommunication, computer and information services. These were partially offset by downward revisions to insurance services.

In February 2015, the UK’s deficit on trade in goods was £10.3 billion, widening by £1.2 billion from January 2015.

Total exports decreased by £0.9 billion (3.7%) to £23.2 billion and total imports increased by £0.3 billion (0.8%) to £33.5 billion.

At the commodity level, the data are shown in Table 2.

In the 3 months ending February 2015, the deficit on trade in goods was £29.4 billion, narrowing by £0.1 billion from the 3 months ending November 2014.

Total exports decreased by £1.2 billion (1.6%) to £72.4 billion and total imports decreased by £1.3 billion (1.2%) to £101.8 billion.

At the commodity level, the data are shown in Table 3.

Monthly analysis

In February 2015, the deficit on trade in goods with EU countries narrowed by £0.1 billion to £7.1 billion. The deficit on trade in goods with non-EU countries widened by £1.3 billion to £3.2 billion (Figure 4).

Between January and February 2015, exports to the EU decreased by £38.0 million (0.3%) to £11.0 billion. Exports to Germany, Greece and Sweden all decreased by £0.1 billion. These decreases were partially offset by an increase in exports to the Netherlands of £0.2 billion.

Between January and February 2015, imports from the EU decreased by £0.1 billion (0.8%) to £18.1 billion. Imports from Germany, the Irish Republic and Italy all decreased by £0.1 billion. These decreases were partially offset by an increase in exports to Belgium and Luxembourg (combined) and to France, both of £0.1 billion.

At the commodity level, the data are shown in Table 4.

Between January and February 2015, exports to non-EU countries decreased by £0.9 billion (6.6%) to £12.1 billion. Exports to the USA decreased by £0.7 billion, and exports to Hong Kong, Japan and Saudi Arabia all decreased by £0.1 billion.

Between January and February 2015, imports from non-EU countries increased by £0.4 billion (2.7%) to £15.4 billion. Imports from China increased by £0.2 billion and from Nigeria, Norway and Russia by £0.1 billion.

At the commodity level, the data are shown in Table 5.

3 Monthly Analysis

In the 3 months ending February 2015, the deficit on trade in goods with EU countries widened by £1.5 billion to £21.1 billion.

Between the 3 months ending November 2014 and the 3 months ending February 2015, exports to the EU decreased by £2.0 billion (5.6%) to £34.4 billion. Exports to the Netherlands decreased by £0.7 billion, France by £0.6 billion, to the Irish Republic by £0.4 billion, and to Belgium and Luxembourg (combined) by £0.3 billion.

Between the 3 months ending November 2014 and the 3 months ending February 2015, imports from the EU decreased by £0.6 billion (1.0%) to £55.5 billion. Imports from Belgium and Luxembourg (combined) decreased by £0.4 billion, and from Denmark and Sweden by £0.2 billion each. These decreases were partially offset by an increase in imports from the Irish Republic of £0.2 billion.

At the commodity level, the data are shown in Table 6.

In the 3 months ending February 2015, the deficit on trade in goods with non-EU countries narrowed by £1.6 billion to £8.3 billion.

Between the 3 months ending November 2014 and the 3 months ending February 2015, exports to non-EU countries increased by £0.9 billion (2.4%) to £37.9 billion. Exports to the USA increased by £1.9 billion and Saudi Arabia by £0.4 billion. These increases were partially offset by a decrease in exports to Switzerland of £1.7 billion, China of £0.7 billion and to Hong Kong of £0.4 billion.

Between the 3 months ending November 2014 and the 3 months ending February 2015, imports from non-EU countries decreased by £0.7 billion (1.5%) to £46.3 billion. Imports from Canada decreased by £0.8 billion and from Nigeria and Russia by £0.3 billion. These decreases were partially offset by an increase in imports from the USA of £0.7 billion and from Qatar of £0.4 billion.

At the commodity level, the data are shown in Table 7.

The UK’s top 5 export trading partners were unchanged in February 2015 when compared with January 2015. An increase in exports to the Netherlands of £0.2 billion and an increase of £17.0 million to France (Table 8), meant the 2 countries switched as the 3rd and 4th largest exporters when compared with January 2015. Outside the top 5, China replaced Belgium and Luxembourg (combined) as the UK's 6th largest export trading partner, due to an increase in exports of £0.1 billion.

Outside the top 10, exports to Greece were at a record low in February 2015 with a fall of £0.1 billion (41.7%) when compared with January 2015. This contributed to a record low trade surplus between the UK and Greece, which stood at £10.0 million in February 2015.

The UK’s top 5 import trading partners were also unchanged in February 2015 when compared with January 2015. Germany remains the UK’s top import trading partner, with imports of £4.9 billion. An increase in imports from China of £0.2 billion led to a record high trade deficit of £2.3 billion in February 2015. Outside the top 5, a £0.1 billion increase in imports sees Norway rise from being the UK's 10th largest import trading partner in January 2015 to the 8th largest this month (Table 8). Anecdotal evidence suggests this was due to an increase in the import of ships and boats.

Outside the top 10, imports from the Czech Republic were at a record high of £0.4 billion, reflecting an increase in imports of passenger motor cars. This increase in imports contributed to the record highest trade deficit between the UK and the Czech Republic of £0.3 billion in February 2015.

In the 3 months ending February 2015, there were record exports to Saudi Arabia and the United Arab Emirates. Exports to Saudi Arabia increased by £0.4 billion to £1.2 billion, contributing to a record high UK trade surplus of £0.8 billion. Exports to the United Arab Emirates increased by £0.2 billion to £1.7 billion.

In the 3 months ending February 2015, there were also record imports from both the Czech Republic and the USA. Imports from the Czech Republic increased by £0.1 billion to £1.3 billion and imports from the USA increased by £0.7 billion to £8.4 billion.

Between January and February 2015, the total volume of exports decreased by 3.1% and the total volume of imports increased by 0.6%.

At the commodity level, the data are shown in Table 10.

In the 3 months ending February 2015, the volume of exports increased by 2.4% and the volume of imports increased by 1.7% when compared with the previous 3 months.

At the commodity level, the data are shown in Table 11.

In February 2015, compared with January 2015, export prices decreased by 0.5% and import prices decreased by 1.3%. Excluding the oil price effect, export prices decreased by 1.3% and import prices decreased by 1.9%.

In the 3 months ending February 2015, when compared with the previous 3 months, export and import prices both decreased by 3.4%. Excluding the oil price effect, export prices decreased by 0.2% and import prices decreased by 0.3%.

In February 2015, the balance on trade in oil was in deficit by £0.7 billion, virtually unchanged when compared with January 2015. Oil exports increased by £0.3 billion to £1.8 billion and oil imports increased by £0.4 billion to £2.5 billion.

In the 3 months ending February 2015, the balance on trade in oil was in deficit by £2.4 billion, narrowing by £0.5 billion when compared with the previous 3 months. Oil exports decreased by £2.0 billion to £5.7 billion and oil imports decreased by £2.5 billion to £8.1 billion.

In February 2015, the UK’s estimated surplus on trade in services was £7.5 billion.

Exports in February 2015 were estimated to have been £18.2 billion and imports £10.7 billion.

In the 3 months ending February 2015, the estimated surplus on trade in services was £22.9 billion.

In the 3 months ending February 2015, exports were estimated to have been £54.8 billion and imports £31.8 billion.

Revisions

Trade in services data have been revised from January 2014.

For 2014, exports of services were revised upwards by £0.1 billion, however there were offsetting revisions throughout the year. 2014 Q4 was revised upwards by £0.6 billion and 2014 Q2 revised downwards by £0.4 billion. For 2014 as a whole financial services were revised upwards partially offset by revisions in transport services. Quarterly Insurance estimates were also revised as a result of updated survey data.

Annually, imports of services for 2014 have been revised upwards by £1.6 billion reflecting revisions from ONS International Trade in Services Survey within other business services and telecommunication, computer and information services. These were partially offset by downward revisions to insurance services.

The UK Trade record information for February 2015 (35.5 Kb Excel sheet) can be accessed on our website.